How is Explosive Growth defined for Health care stocks: CSL, COH, VHT

  • Nov 22, 2019 AEDT
  • Team Kalkine
How is Explosive Growth defined for Health care stocks: CSL, COH, VHT

The growth in the health care sector is not definite, and it is always proportional to the research and development programs of the company. The health care sector, which includes pharmaceuticals, as well as biotech companies, is more focused towards the new drug development. The health care companies keep expanding by launching their products in different countries. For pharmaceutical/biotech companies, it is also essential to develop a well-defined clinical pipeline. The investors always wish to invest in those health care companies who are conducting successful trials or expanding its business globally.

In this article, we are discussing three ASX listed health care stocks which have performed well in the past year with a robust pharmaceutical product portfolio.

Let’s zoom the lens for CSL, COH & VHT-

CSL Limited (ASX: CSL)

Melbourne headquartered, global biotechnology company CSL Limited (ASX: CSL) is engaged in research, development and marketing of the pharmaceutical products that are used for the treatment of serious human diseases. The company is mainly focused on providing treatments for bleeding disorders, neurological disorders, ?1 antitrypsin deficiency, immunodeficiency and hereditary angioedema. CSL also provides therapies for preventing bleeding in an emergency and hemolytic disease in the newborn. The company operates in more than 35 countries with over 25,000 employees across the globe, including more than 1,700 R&D employees.

Business & Financial highlights- (for year ended 30 June 2019)

During financial year 2019, the company registered a total of 24 products or new indications for rare or serious diseases. This year CSL has shown excellent growth, including new product launch and increased growth of sale of its existing products.

  • Japan’s Ministry of Health, Labour and Welfare in March 2019, approved two CSL products for the treatment of patients with chronic inflammatory demyelinating polyneuropathy-
    • HIZENTRA® is the first and only subcutaneous immunoglobulin approved for maintenance therapy to treat chronic inflammatory demyelinating polyneuropathy (CIDP) in Japan.
    • PRIVIGEN® which is intravenous immunoglobulin, approved for both acute and maintenance treatment of CIDP in Japan.
  • The US Food and Drug Administration (FDA) approved convenient single-vial dosing for ZEMAIRA® in April 2019.
  • The company continued strong growth in immunoglobulin and albumin therapies, PRIVIGEN® sales increased to 23%, HIZENTRA® sales increased to 22% and ALBUMIN sales up 15%
  • CSL’s HAEGARDA®, which is a treatment for Hereditary Angioedema (HAE) performed well in FY2019 and reported 61% of the sale.
  • IDELVION® for Haemophilia B patients reflected an increased sale growth of 40%.
  • The company inaugurated 30 new plasma collection centres in the United States.
  • The financial year 2019 has been a strong year with a total revenue of US$7,343 million up by 10% and reported a net profit after tax (NPAT) of US$1,919 million.

Let’s now have a look at CSL’s stock performance on ASX. On 22 November 2019, the company’s stock last traded at $269.650, up by 0.993% from its last close. The company’s stock has a P/E ratio of 44.200x, with an annual dividend yield of 1%. CSL has delivered a return of 44.03% on a year to date basis.

Cochlear Limited (ASX: COH)

A health care medical device company Cochlear Limited (ASX: COH) is working with the aim of improving hearing by providing several hearing aids and is a global leader in implantable hearing solutions. The company is continuously working at the geographical level, offering its services in over 100 countries. COH is headquartered in the campus of Macquarie University in Sydney and operating in more than 30 countries with approximately 4,000 employees across the globe. Presently, Cochlear is a top 50 listed Australian company, and to date, it has provided over 550,000 implant devices.

Coming to the recent achievement of Cochlear, the company has recently received FDA approval for the world’s first active osseointegrated steady-state implant- Cochlear™ Osia® 2 System, which bypasses damaged areas of the natural hearing system by using digital piezoelectric stimulation.

With digital piezoelectric stimulation, Osia® 2 System send sound vibrations directly to the cochlea. The company unveiled that it would start commercialisation of this system in the second half of the fiscal year 2020 in the United States.

Highlights FY2019- (year ended 30 June 2019)

  • The company increased its investment in research & development to $184 million up by 10%.
  • In the fiscal year 2019, COH launched some new products which includes - Nucleus® ProfileTM Plus Series cochlear implant, Cochlear TM Research Platform ECochG surgical tool, ForwardFocus feature, Nucleus 7 Android audio streaming capability.
  • In November 2019, Cochlear signed an agreement with GN Hearing, the hearing aid division of the GN Group, to develop best-integrated hearing solutions. With this collaboration, both companies would focus towards strengthening their technology as well as commercial alliance.
  • FY2019 remains financially stable for COH and the company delivered a net profit of $276.7 million, up by 13% on the prior corresponding period (pcp).
  • The operating cash flow of the company increased to $296.0 million.

Financial outlook (FY2020)

For the financial year 2020, the company is expecting to deliver a net profit of $290-300 million, which is up by 9-13% on the underlying net profit for the fiscal year 2019. As Cochlear has launched new implants in late FY2019, the company is expecting a strong growth in its implant units in the fiscal year 2020. In the annual report of FY2019, Cochlear has also mentioned that the company would continue its investment in market awareness and access activities.

Let’s have a look at the company’s stock performance on ASX. On 22 November 2019, COH stock remained in the green zone and was at $224.840, up by 0.997% from its previous closing price. The market cap of the company was noted at $12.87 billion with a 52 weeks high price of $227.390 and low price of $155.220. The stock has a P/E ratio of 46.420x, with 1.48% of an annual dividend yield.

Volpara Health Technologies Limited (ASX: VHT)

New Zealand based research, development and manufacturing company Volpara Health Technologies Limited (ASX: VHT) is engaged in developing digital health solutions for better clinical decision making and early detection of breast carcinoma. The company’s software provides a better understanding of the patients to clinicians. Volpara has a varied research team which is headed by renowned medical physics experts and also has various patents & trademarks for proprietary medical imaging technology.

Half-year results FY2020- (ended 30 September 2019)

  • In June 2019, Volpara acquired MRS Systems based in Seattle.
  • The company invested in its business capacity and capability, appointed three new executives to Volpara executive team (operations).
  • Volpara generated total revenue of worth NZ$6.8 million on prior corresponding period (pcp).
  • The company’s subscription revenue was up 148% worth NZ$5.2 million on pcp.
  • The capital revenue for FY2019 was NZ$1.7 million, up by 680% as compared to the fiscal year 2019.
  • The percentage of women who applied a group product on their images and data was approximately 25.8%, which is up from 5.6% on pcp.

Source: Investor’s presentation

Business Outlook-

Volpara is a rapidly growing SaaS company, and it will continue its focus towards the following goals for the upcoming six months-

  • The company will focus on Accelerated sales growth and expanding globally.
  • Volpara mentioned that the company’s product suite has expanded as compared to the last 12 months enabling for increased average revenue per user (ARPU) at new and existing customer sites.
  • The company would focus on restraining costs and optimizing with integration with MRS Systems Inc, which was remarkably smooth till now.
  • The company will focus on improving its R&D and product development. With this, the company is also planning to expand its engineering and sciences teams.
  • The main goals and focus of Volpara for the year are to remain unchanged, and it will continuously work to save families who have patients suffering from breast cancer.

Let’s have a look at the company’s stock performance on ASX. On 22 November 2019, VHT stock was at $1.790, up by 1.13% from its prior closing price. The market cap of the company was noted at $218.06 million with a 52 weeks high price of $2.170 and low price of $0.924.


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